NEWSLETTER : AI-Tech-Health NEWS Update & The High Cost of Data Loss: Lessons from a Cloud Storage Failure

In today?s digital-first world, businesses rely heavily on cloud services to store critical data and run operations. However, the recent case of Adarsh Developers, an Indian real estate company, serves as a reminder that even the most trusted cloud providers are not immune to failures. The company suffered catastrophic data loss, halting operations and incurring massive financial and reputational damage.

This incident isn't just a one-off-it?s a cautionary tale for businesses worldwide. Here?s what we can learn :

What happened ?

Adarsh Developers stored their SAP ERP system on AWS Amazon Web Services), which contained six years of vital business data, including financial records, customer information, and supply chain details. In January 2025, due to alleged actions by third-party personnel with root level access, the entire system was wiped out.

The result?

·?????? ?150 crore in estimated financial losses.

·?????? A complete halt in business operations.

·?????? Legal battles with AWS and its vendor, Redington Group, over accountability

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Key Takeaways for Businesses:

1.??Cloud Providers Are Not Responsible for Your Data Integrity:

?Cloud providers like AWS operate under shared responsibility models, meaning they manage infrastructure security but do not guarantee the integrity or recovery of client data. Businesses must take ownership of their data protection strategies.

Lesson: Always have independent backups and disaster recovery plans in place

?2.?Centralized Systems Pose Single Points of Failure:

Adarsh Developers relied entirely on one cloud provider to store critical data. When that system failed, the company had no fallback options.

Solution:

Implement a multi-cloud strategy to distribute risk across multiple providers (e.g., AWS Azure + Google Cloud).

Consider hybrid models that combine cloud and on-premises storage for redundancy

?3.?Human Error is Often the Weakest Link:

The alleged root-level deletion by vendor personnel highlights how human error or mismanagement can lead to catastrophic outcomes. Misconfigurations and unmanaged access are two of the leading causes of cloud data loss globally

Actionable Steps:

Use role-based access control RBAC to limit permissions only to essential personnel.

Enable multi-factor authentication MFA for all administrative accounts.

Regularly audit access logs to detect unusual activity

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4.??Backups Are Non-Negotiable

Data loss can happen due to cyberattacks, misconfigurations, or even natural disasters. Without robust backups, businesses risk losing years of work in seconds

Best Practices for Backups:

Follow the 321 Rule: Keep 3 copies of your data on 2 different storage types (e.g., cloud + local), with 1 copy offsite (e.g., cold storage).

Test backup restoration processes regularly to ensure they work when needed.

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5.??Disaster Recovery Plans Save Lives (and Businesses)

Adarsh Developers? inability to recover quickly led to daily losses of ?5 crore. A well tested disaster recovery plan could have minimized downtime and mitigated financial damage

Tips for Disaster Recovery:

Use automated disaster recovery tools for real-time replication and failover capabilities.

Conduct regular drills simulating worst-case scenarios to identify gaps in your recovery process

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Is Cloud Still Safe?

Cloud computing remains a powerful tool for businesses of all sizes, offering scalability, cost savings, and flexibility. However, incidents like this highlight the importance of understanding its limitations:

• Cloud services are essentially “someone else?s computer.” While providers like AWS invest heavily in security, ultimate responsibility for your data rests with you.
• Centralized systems are convenient but inherently risky if not paired with robust redundancy measures.

Many organizations are now adopting multi-cloud strategies, decentralizing their critical systems across multiple platforms or even bringing some workloads back on-premises

How You Can Protect Your Business

1.????? Teach employees about best practices for managing cloud systems and preventing misconfigurations.

2.????? Ensure contracts clearly define roles, responsibilities, and liability in case of data loss.

3.????? Use tools to detect vulnerabilities in real time.

4.????? Plan for the Worst failure ahead and prepare, test accordingly

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By adopting best practices like multi-cloud strategies, robust backups, and disaster recovery plans, businesses can mitigate risks and ensure continuity even in the face of unexpected challenges.

The cloud is powerful, but not completely secure. Cloud computing stores data online, while cybersecurity protects it from threats. Both must work together to keep your data safe.

Source : Adarsh Developers Files Complaint Against AWS Over ?150 Crore Business Loss from Data Deletion